Slide 1: Q3 2010 Results
Q3 2010 Results CEO Frontline Mgt, Jens Martin Jensen CFO Frontline Mgt, Inger M. Klemp November 24, 2010
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION AND ITS ENCLOSURES AND APPENDICES (HEREINAFTER JOINTLY REFERRED TO AS THE “PRESENTATION” HAS BEEN PREPARED BY FRONTLINE LTD. (“FRONTLINE” or THE ”COMPANY”) EXCLUSIVELY FOR INFORMATION PURPOSES. THIS PRESENTATION HAS NOT BEEN REVIEWED OR REGISTERED WITH ANY PUBLIC AUTHORI
Slide 3: Agenda
Agenda Third Quarter 2010 Highlights and Transactions Financial Review Newbuildings Market Update Outlook Q&A 3
Slide 4: Highlights and transactions
Third Quarter 2010 Highlights and transactions Delivery of Newbuildings Hull H2420 – Front Signe, VLCC, Shanghai Waigaoqiao Shipyard (“SWS”), 9 August 2010 Hull H1026 – Front Njord, Suezmax, Rongsheng Shipyard, 12 August 2010 Renegotiation of Shipbuilding Contracts Jinhaiwan (Sep.) New Tim
Slide 5: Financial Highlights
Third Quarter 2010 Financial Highlights 120 Q3 2010 results 103 100 81 80 80 77 Net income: $12.3m EPS: $0.16 60 Net income excl. gain: $5.4m 40 28 EPS excl. gain: $0.07 20 12 4 0 -6 Net income YTD: $173.3m Q3 Q2 Q1 FY Q4 Q3 Q2 Q1 -20 EPS YTD: $2.23 2010 2009 Net income excl. gain YTD:
Slide 6: Income Statement
Financial Review Income Statement 2009 2010 CONDENSED CONSOLIDATED INCOME STATEMENTS 2010 2009 2009 (in thousands of $) Jul-Sept Jul-Sept Jan-Sept Jan-Sept Jan-Dec 233,008 251,111 Total operating revenues 939,050 871,145 1,133,286 3,061 6,843 Gain on sale of assets and amortization of deferred gains
Slide 7: Income on time charter basis
Financial Review Income on time charter basis 2010 2009 $/day YTD Q3 Q2 Q1 YTD Q3 VLCC Spot DH 42 100 30 000 50 020 49 200 40 700 26 800 VLCC Spot SH 23 500 24 400 22 100 23 600 25 900 20 000 VLCC Spot 41 500 29 900 49 500 47 500 39 400 26 300 VLCC w hole fleet 40 300 29 800 46 600 45 300 40 200 32
Slide 8: Ship operating expenses/Off-hire
Financial Review Ship operating expenses/Off-hire Total fleet opex ($/day) Number of vessels drydocked 12 000 18 16 11 400 16 11 500 14 11 000 12 10 500 10 600 10 500 10 200 10 10 100 10 000 9 900 9 800 8 9 700 6 5 9 500 4 4 4 3 3 9 000 2 2 2 8 500 0 Q3 Q2 Q1 FY Q4 Q3 Q2 Q1 Q3 Q2 Q1 FY Q4 Q3 Q2 Q1 2
Slide 9: Balance sheet
Financial Review Balance sheet Balance sheet (in $ million) 2010 2010 2009 Sep. 30 Jun. 30 Dec. 31 Cash 208 169 83 Restricted cash 225 236 430 Other Current assets 228 345 271 Long term assets: Restricted cash 0 69 70 Vessels 2 911 2 782 2 419 Newbuildings 185 278 414 Other long term assets 87 88 29
Slide 10: Cash Cost Breakeven
Financial Review Cash Cost Breakeven Estimated Cash cost breakeven rates Q4 2010 ($/day) VLCC 31,300 Suezmax 24,900 Suezmax OBO 30,600 Comments to B/E rates: Included in cash B/E rates are: BB hire/installments & interest loans + opex and admin. costs. B/E rates exclude vessels on short term TC-
Slide 11: Newbuildings
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Slide 12: Newbuildings Overview
Newbuildings Newbuildings Overview Total newbuilding program end Q3-10 approx. $650m Five VLCCs and two Suezmax tankers. Installments paid per end Q3-10: $162m Remaining installments to be paid approx. $488m H1026 “Front Njord” and H2420 “Front Signe” were delivered in August 2010. VLCC Hu
Slide 13: Financing
Newbuildings Financing Fully drawn financing on newbuildings delivered as per end Q3-10: Two VLCCs from SWS and four Suezmax from Rongsheng: $367.4m outstanding debt Two VLCCs from SWS: $145.2m outstanding debt $147m facility secured for Jinhaiwan hull no. J0025 and J0026 in Nov. 70% of co
Slide 14: Capital Expenditures
Newbuildings Capital Expenditures USDm 600 500 29 400 300 488 459 200 100 185 195 165 144 95 99 63 63 0 -4 -10 -20 -100 Q4 2010 2011 2012 2013 Total Total cap.ex. Committed and assumed financing* Funds from convertible bond 14 *Assumed financing for the unfinanced NBs approx. 70% of market value
Slide 15: Frontline Fleet
Corporate Overview Frontline Fleet Incl. vessels on commercial management & ITCL, excl. newbuildings OBO 8 VLCC SH 5 Suezmax DH 21 VLCC DH 46 Total: 80 DH: Double Hull, SH: Single Hull 15
Slide 16: Frontline Fleet
Corporate Overview Frontline Fleet 2010 VESSELS AS PER END 2011 No. of Av. TC Av. Net Av. TC Av. Net No. of vessels Coverage TC/BB Rate Coverage TC/BB Rate vessels (current) (2010) $/day (2010) (year) ($/day) DH 34 15 % 45 600 31 17 % 43 900 SH 1 77 % 41 100 VLCC SH/DS on BB-out 4 94 % 15 800 * 4 69
Slide 17: Earnings & Market Factors
Market Update Earnings & Market Factors Q3 – Average Market earnings 240 000 VLCC ■ VLCC : $17,000/day 220 000 200 000 ■ Suezmax : $14,500/day 180 000 160 000 140 000 Market Movers $ / day 120 000 ■ Fall in floating VLCC storage (from abt. 35 in Q2 to 3-5 in 100 000 Q3) 80 000 60 000 40 000 ■ Chines
Slide 18: VLCC Fleet
Market Update VLCC Fleet Fleet Slippage 43 vs. 55 22% Current fleet & Orderbook Delivery Schedule 18 Source: Fearnleys October 2010
Slide 19: Suezmax Fleet
Market Update Suezmax Fleet Fleet Slippage 32 vs. 49 35% Current fleet & Orderbook Delivery Schedule 19 Source: Fearnleys October 2010
Slide 20: Newbuilding and TC market rates
M USD 50 70 80 60 90 100 120 140 150 160 170 110 130 180 2006-01 2006-04 2006-07 2006-10 FRO VLCC NB Rates 2007-01 Market Update 2007-04 2007-07 2007-10 2008-01 Re-structured 2008-04 . FRO SMAX NB 2008-07 2008-10 2009-01 NEWBUILDING 2009-04 VLCC NB 2009-07 2009-10 2010-01 2010-04 SMAX NB 2010-07 201
Slide 21: Outlook
Outlook FLEET ■ Large tanker ordering slowing down, but the orderbook is still sizeable ■ Delivery slippage continues ■ Oil Major vetting criteria being tightened WORLD ■ Chinese oil demand expected to continue its growth to 9.5 mb/d in 2011 (up 4.2% from 2010) ■ Increased ton mile situation ■ Conti